10 June 2008 08:42 [Source: ICIS news]
KUALA LUMPUR (ICIS news)--The oil industry will have to look for new solutions to sustain the growth which it has propelled, said a senior executive of Oil & Natural Gas Corp (ONGC), India.
"Aspirations for a better quality of life demand more and more energy from a shrinking resource base. Oil and gas, the most convenient fuels, are under tremendous pressure," said RS Sharma, chairman and managing director of the Indian major at the 13th Asia Oil and Gas Conference (AOGC) late on Monday.
"Energy needs have generated unprecedented competition to establish control over oil and gas assets leading to intense geopolitics and resource nationalism. This makes resource centres unstable and prices volatile, intensifying speculative activities and putting oil at an unprecedented premium," Sharma said.
Crude had touched a new historical high recently on a weak US dollar and political instability in the Middle East.
"The world energy demand is set to increase, so is the demand and supply gap. Production levels have stayed largely flat since 1996 and we are in desperate needs of new solutions," he said, adding that more efficient management of existing oil and gas assets was required.
Echoing the views of BP CEO Tony Hayward, Sharma said the industry must form alliances that would help ensure cost competitiveness.
There was also a need to explore for new oil and gas assets, even from the most challenging locations especially since the era of "easy oil" had passed, he added.
Growth in the oil industry could be sustained only through the proper management of demand, Sharma said. "Governments must gradually remove generous subsidies as they distort market demands through inefficiency and wastage."
The AOGC is an industry-wide forum and runs from 8-10 June.
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